UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14a (Rule 14a-101)
Information Required In Proxy Statement
Schedule 14a Information
Proxy Statement Pursuant To Section 14(A) Of The Securities
Exchange Act Of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary proxy statement
|_| Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
|X| Definitive proxy statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
TCSI Corporation
--------------------------
(Exact name of Registrant as specified in its charter)
Not Applicable
--------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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|_| Check box if any part of the fee is offset as provided by Exchange Act
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4) Date Filed:
<PAGE>
LOGO
TCSI Corporation
1080 Marina Village Parkway
Alameda, California 94501
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 5, 1998
TO OUR SHAREHOLDERS
You are cordially invited to the Annual Meeting of Shareholders of TCSI
Corporation (the "Company") which will be held at 3:00 p.m. (local time) on
Tuesday, May 5, 1998, at the Company's offices at 1080 Marina Village Parkway,
Alameda, California 94501, for the following purposes as described in the
accompanying Proxy Statement:
1. To elect six (6) directors to the Board of Directors;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
for the Company for the year ending December 31, 1998; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Shareholders of record at the close of business on March 16, 1998 are
entitled to notice of, and to vote at the meeting or any adjournments thereof.
Your vote is important to the Company. Please complete, sign, date, and
return the enclosed proxy card in the enclosed, postage-paid envelope. If you
attend the meeting and wish to vote in person, you may withdraw your proxy and
vote your shares in person.
Sincerely,
/s/ Ram A. Banin
Ram A. Banin
President and Chief Executive Officer
March 17, 1998
<PAGE>
Mailed to shareholders on
or about April 6, 1998
TCSI CORPORATION
---------------------------------
PROXY STATEMENT
---------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of the Company, for use at the 1998 Annual
Meeting of Shareholders ("Annual Meeting") to be held at 3:00 p.m. (local time)
on Tuesday, May 5, 1998, at 1080 Marina Village Parkway, Alameda, California
94501, the Company's principal executive offices.
Each shareholder of record of Common Stock of the Company ("Common Stock")
on March 16, 1998 ("Record Date") is entitled to vote at the Annual Meeting and
will have one vote for each share of Common Stock held at the close of business
on the Record Date. A majority of the shares entitled to vote will constitute a
quorum. On March 16, 1998, there were 22,272,958 shares of Common Stock
outstanding. All references to share numbers herein give effect to the Company's
three-for-two stock split in May 1996.
Shareholders unable to attend the Annual Meeting may vote by proxy. The
proxies will vote such shares according to your instructions. If a shareholder
returns a properly signed and dated proxy card but does not mark a choice on one
or more items, such shareholder's shares will be voted in accordance with the
recommendations of the Board of Directors as set forth in this Proxy Statement.
The proxy card gives authority to the proxies to vote shares at their discretion
on any other matter presented at the Annual Meeting.
Shareholders may revoke proxies at any time prior to voting at the Annual
Meeting by delivering written notice to the Secretary of the Company, by
submitting a subsequently dated proxy, or by attending the meeting and voting in
person at the meeting. Under applicable state law and the bylaws of the Company,
a quorum is required for the matters to be acted upon at the Annual Meeting. A
quorum is defined as a majority of the shares entitled to vote, represented in
person or by proxy, at the meeting. To pass, each matter submitted to a vote,
except the election of directors, must be approved by a majority of the shares
represented and voting in person or by proxy at the meeting. Shares represented
by proxies which are marked "abstain" or in a manner so as to deny discretionary
authority on any matter will be counted as shares present for purposes of
determining the presence of a quorum; such shares will also be counted as shares
present and entitled to vote, which will have the same effect as a vote against
any matter other than election of directors. Proxies relating to "street name"
shares which are not voted by brokers on one or more matters will not be treated
as shares present for purposes of determining the presence of a quorum unless
they are voted by the broker on at least one matter. Such non-voted shares will
not be treated as shares represented at this meeting as to any matter for which
non-vote is indicated on the broker's proxy. Director nominees must receive a
plurality of the votes cast at the meeting, which means that a vote withheld
will not affect the outcome of the election.
The Company will bear the cost of preparing, handling, printing, and
mailing this Proxy Statement, the accompanying proxy card, and any additional
material which may be furnished to shareholders, and the actual expense incurred
by brokerage houses, fiduciaries, and custodians in forwarding such materials to
beneficial owners of Common Stock held in their names. The solicitation of
proxies will be made by the use of the mails and through direct communication
with certain shareholders or their representatives by officers, directors, or
employees of the Company who will receive no additional compensation therefor.
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
At the Annual Meeting, six (6) directors of the Company are to be elected
to serve until the next annual meeting or until their respective successors are
elected or appointed. The authorized number of directors of the Company has been
fixed at six (6) by the Board of Directors.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them FOR the six (6) nominees of the Board of Directors named below.
In the event that any nominee of the Company is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. It is not expected that any nominee will be unable or will decline to
serve as a director. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received by
them FOR the remaining nominees and such proxies may be voted for the election
of a substitute nominee recommended by the Board of Directors.
<TABLE>
<CAPTION>
Name Age Title Director Since
<S> <C> <C> <C>
John C. Bolger 51 Chairman of the Board 1992
Ram A. Banin, Ph.D. 56 President, Chief Executive Officer and 1997
Director
Norman E. Friedmann, Ph.D. 69 Director 1998
William A. Hasler 56 Director 1993
David G. Messerschmitt, Ph.D. 52 Director 1991
Harvey E. Wagner 61 Director 1989
</TABLE>
Except as set forth below, each of the directors has been engaged in the
principal occupation described below. There are no family relationships among
any of the directors listed above.
John C. Bolger was appointed Chairman of the Board in February 1998 and has
been a member of the Board of Directors since July 1992. Mr. Bolger, now a
private investor, served as Vice President, Finance and Administration, and
Secretary of Cisco Systems, Inc. from 1989 until his retirement in 1992. Mr.
Bolger is also a member of the Board of Directors for Sanmina Corporation,
Integrated Systems, Inc., Network Associates, Inc., and Integrated Device
Technology, Inc.
Ram A. Banin, Ph.D. became a member of the Board of Directors in July 1997.
Dr. Banin joined TCSI in May 1992 and has served as President since December
1996 and Chief Executive Officer since July 1997. Prior to joining TCSI, Dr.
Banin founded and operated Banin Associates. Dr. Banin was also co-founder and
Chief Executive Officer of Atherton Technology from 1986 to 1989, as well as
co-founder and Senior Vice President of Daisy Systems from 1980 to 1985. Dr.
Banin holds a Ph.D. and an M.A. in Computer Science from the University of
California at Berkeley, and an M.S. and B.S. in Physics and Physics Mathematics,
respectively, from the Hebrew University of Jerusalem, Israel.
Norman E. Friedmann, Ph.D. became a member of the Board of Directors in
February 1998. He has served as a management consultant to the Company for the
past year. Dr. Friedmann currently manages Friedmann Enterprises, and previously
served as Executive Vice President and Chief Operating Officer of Herbalife
International, Inc. from 1992 until his retirement in 1995. Dr. Friedmann
founded and managed Friedmann Enterprises from 1990 to 1992, he served as
President, Chief Executive Officer, and member of the Board of Directors of
Daisy Systems from 1987 to 1989, and he also founded and served as President,
Chief Executive Officer, and Chairman of the Board of Cordura Corporation from
1965 to 1987.
William A. Hasler became a member of the Board of Directors in May 1993.
Mr. Hasler is currently Dean of the Walter Haas School of Business at the
University of California at Berkeley. Prior to his appointment at the University
of California in 1991, Mr. Hasler joined the firm of KPMG Peat Marwick in 1972
and served in various executive positions and
<PAGE>
as a member of the Board of Directors. Mr. Hasler also serves on the Board of
Governors of the Pacific Stock Exchange and the Board of Directors for The Gap,
TENERA, Inc., Aphton, RCM Strategic Global Government Fund, and Walker
Interactive Systems.
David G. Messerschmitt, Ph.D. is currently a Professor in the Electrical
Engineering and Computer Science Department at the University of California at
Berkeley. Dr. Messerschmitt has served on such faculty since 1977. Dr.
Messerschmitt has served as a technical consultant to the Company on a part-time
basis since 1983 and became a director of the Company in May 1991.
Harvey E. Wagner has been a director since 1989 and was Chairman of the
Board of Directors from March 1989 to March 1996. Mr. Wagner is Chairman of the
Board, Chief Executive Officer, and President of Teknekron Corporation, which he
founded in 1968.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF
THE NOMINEES LISTED ABOVE
BOARD MEETINGS, COMMITTEES, AND DIRECTOR COMPENSATION
The Board of Directors held five (5) meetings during 1997. Each Board
member attended all meetings of the Board of Directors and of the committees of
the Board on which he served.
Among the standing committees of the Board of Directors of the Company are
the Compensation Committee, the Audit Committee, and the Administrative
Committee. The Board of Directors does not have a Nominating Committee.
Selection of nominees for the Company's Board of Directors is made by the entire
Board of Directors.
The Board of Directors has a Compensation Committee composed of two
members, John C. Bolger and William A. Hasler. The Compensation Committee,
composed entirely of non-employee directors, is responsible for establishing and
reviewing annually the compensation levels of executive officers of the Company
and reviewing recommendations made by Company management concerning salaries and
incentive compensation for employees of the Company. The Compensation Committee
met one (1) time during 1997.
The Board of Directors has an Audit Committee composed of two members, John
C. Bolger and William A. Hasler. The Audit Committee reviews the results and
scope of the audit and other services provided by the Company's independent
auditors and recommends the appointment of independent auditors to the Board of
Directors. See Proposal 2. The Audit Committee met three (3) times during 1997.
In 1996, the Board of Directors appointed an Administrative Committee of
the Company's 1991 Stock Incentive Plan which is composed of two members, John
C. Bolger and William A. Hasler. Such committee did not meet in 1997.
Directors who are not employees of the Company received a fee of $1,000 per
meeting of the Board or committee of the Board attended in 1997, plus
reimbursement of expenses incurred in attending such meetings. If the Board of
Directors meeting and a committee meeting occur on the same day, directors who
attend both meetings receive only one (1) fee. Messrs. Bolger, Hasler, Wagner
and Dr. Messerschmitt, each receive an annual fee of $10,000 in addition to the
per meeting fee. Dr. Friedmann received $154,749 and options to purchase 10,000
shares of Common Stock at an exercise price of $5.8002 for consulting work he
performed for the Company during 1997. No other consulting fees were paid to
directors for work performed for the Company during 1997.
Under the 1994 Outside Directors Stock Option Plan (Directors Plan) each
eligible director is granted options to purchase 31,500 shares upon appointment
or election to the Board of Directors. Each year, eligible directors are granted
options to purchase an additional 6,000 shares. Options vest monthly over a
three-year period. Pursuant to this plan, each director as of December 31, 1997,
except Dr. Friedmann who joined the Board in February 1998, received options to
purchase 6,000 shares of the Company's Common Stock at an exercise price of
$6.2626 per share during the year ended December 31, 1997.
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, OFFICERS, AND
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of January 15, 1998 concerning
ownership of Common Stock by each director, each nominee, and the Named
Executive Officers, as defined below, all directors, nominees and Named
Executive Officers as a group, and the only persons known by the Company to own
5% or more of the outstanding shares of its Common Stock. Unless otherwise
noted, the listed persons have sole voting and dispositive powers with respect
to the shares shown as beneficially owned, subject to community property laws if
applicable.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial
Ownership(5)
Name Number Percent
- -------------------------------------------- ------------- -----------------
<S> <C> <C>
BENEFICIAL OWNERS AND MANAGEMENT
Amerindo Investment Advisors (1) 6,921,450 31.2%
One Embarcadero Center, Suite 2300
San Francisco, California 94111-3162
Bankers Trust New York Corporation (2) 1,429,011 6.4
One Bankers Trust Plaza
New York, NY 10006
Harvey E. Wagner 797,875 3.6
Ram A. Banin, Ph.D. (3) 248,750 1.1
David G. Messerschmitt, Ph.D. (3) (4) 183,605 *
William A. Hasler (3) 29,501 *
John C. Bolger (3) 13,501 *
Norman E. Friedmann, Ph.D. (3) 2,500 *
Arthur H. Wilder 0 *
All directors and named executive officers as a group 1,417,732 6.3%
(eight persons) (3) (4)
</TABLE>
- -----------------------------
* Less than 1%
(1) Based on an amendment to Schedule 13G filed with the Securities and
Exchange Commission on February 13, 1998 by Amerindo Investment
Advisors Inc. ("Amerindo"). Amerindo has the sole power to vote and
dispose of all 6,921,450 shares.
(2) Based on a schedule 13G filed with the Securities and Exchange
Commission on February 13, 1998 by Bankers Trust New York Corporation
("BT"). BT has the sole power to vote and dispose of all 1,429,011
shares.
(3) Includes shares issuable upon exercise of options to purchase the
company's common stock under the company's stock option plans that are
exercisable within 60 days of January 15, 1998.
(4) Includes shares held in a family trust/family foundation in which the
director controls or shares investment and voting power.
(5) Beneficial ownership is determined in accordance with the rules of the
SEC. In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of common stock
subject to options or warrants held by that person that are currently
exercisable or exercisable within sixty (60) days of January 15, 1998
are deemed outstanding. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of
any other person. Except as indicated in the footnotes to this table
and pursuant to applicable community property laws, each shareholder
named in the table has sole voting and investment power with respect
to the shares set forth opposite such shareholder's name. Percentage
ownership is based on 22,156,949 shares of common stock outstanding on
January 15, 1998.
<PAGE>
COMPENSATION COMMITTEE REPORT
The report of the Compensation Committee (the "Committee") shall not be
deemed incorporated by reference by any general statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934 and
shall not be otherwise deemed filed under such Acts.
The Company's compensation program is reevaluated annually. The program,
designed to encourage teamwork and cooperation and to motivate key personnel,
establishes a base salary for each executive with annual cash incentives to be
paid based on attainment of defined performance goals. The overall structure of
the plan is the same for corporate staff, functional leaders, and other key
personnel in that specific targets are set for each individual. The target bonus
(up to 50% of salary) is paid to an individual achieving expected performance.
Higher percentages may be paid for extraordinary performance.
The annual targets are set by the Committee based on recommendations from
members of executive management at the end of the previous year and include
between two and five specific performance measures focused in the individual's
area of responsibility. The performance of executive officers is measured based
on overall Company performance, including earnings per share. All compensation
awarded is at the discretion of the Board of Directors.
The Committee recognizes that stock options are considered a standard
component of competitive compensation packages throughout the industry. As part
of the Company's longer term incentive compensation program, generally all
employees, including executive officers, are eligible for awards under the
Company's 1991 Stock Incentive Plan, which permits the grant of stock options or
restricted stock. As the options provide value to the owner only when the price
of the Company's stock increases above the grant price of the options, senior
management attains the perspective of a shareholder with regard to the Company's
financial position. Stock option grants are based on a median competitive grant
level dependent only on a threshold level of corporate performance. Stock
options are generally granted at a price equal to the fair market value on the
date of the grant. The Committee has the authority to grant additional options
at year-end (within ranges established at the beginning of the year) for
individuals believed to have exhibited extraordinary performance during the
year.
Senior management also participates in company-wide employee benefit plans,
including the Company's Profit Sharing/401(k) Plan. Benefits under these plans
are not dependent upon individual performance.
The Committee believes that executive compensation should not only be
within competitive norms, but also be highly related to individual and corporate
performance. The 1998 base salaries for Dr. Banin, the President and Chief
Executive Officer, and all other executive officers were established at a
meeting of the Board of Directors held on January 27, 1998 based upon the
Company's 1997 performance. Upon his confirmation as President, Chief Executive
Officer and a Director of the Company on June 11, 1997, Dr. Banin was granted
the right to purchase an additional 500,000 shares of Common Stock. He replaced
Mr. Strauch, who resigned on June 30, 1997. The 1997 base salary for Dr. Banin
was unchanged at $230,000 in 1996 and 1997. Effective January 1, 1998, Dr.
Banin's base salary was increased to $250,000 for his leadership effort and
commitment to the Company. He was also granted the right to purchase an
additional 125,000 shares of Common Stock.
Compensation Committee
John C. Bolger
William A. Hasler
January 27, 1998
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to stock
option grants during fiscal years ended December 31, 1997, 1996, and 1995 to the
Company's Chief Executive Officer and the Company's other most highly
compensated executive officers (collectively, the "Named Executive Officers").
In accordance with the rules of the SEC, also shown below is the potential
realizable value over the term of the option (the period from the grant date to
the expiration date) based on assumed rates of stock appreciation from the
option exercise price of 5% and 10%, compounded annually. These amounts are
based on certain assumed rates of appreciation and do not represent the
Company's estimate of future stock price. Actual gains, if any, on stock option
exercises will depend on the future performance of the Common Stock.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
--------------------------------------- ---------------
Number of
Name and Principal Other Annual Securities All Other
Position Year Salary ($) Bonus ($) Compensation Underlying Compensation
(1) ($) Options/SARs(#) ($) (4)
(2)(3)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ram A. Banin, Ph.D. 1997 230,000 -- -- 625,000 (7) 4,750
President and 1996 230,000 -- 20,696 (6) 75,000 4,750
Chief Executive 1995 210,000 200,000 -- 60,000 4,620
Officer (5)
Roger A. Strauch, 1997 115,000 -- -- -- 4,600
President and 1996 250,000 -- 24,738 (6) 30,000 4,750
Chief Executive 1995 245,000 150,000 -- 90,000 4,620
Officer (8)
Arthur H. Wilder, 1997 17,558 -- -- 110,000 (10) --
Chief Financial 1996 -- -- -- -- --
Officer, 1995 -- -- -- -- --
Secretary, and
Treasurer (9)
</TABLE>
- ----------------
(1) Includes bonuses accrued in 1994 paid in 1995.
(2) Reflects options only. No SARs have been issued.
(3) Options have been adjusted for the three-for-two split in
May of 1996.
(4) These amounts represent the amounts accrued for the
Company's contributions to the Company's Profit Sharing/401K
Plan for 1997, 1996, and 1995, respectively, and allocated
to the named executive officers.
(5) Dr. Banin was appointed as Chief Executive Officer and
elected to serve on TCSI's Board of Directors effective July
1, 1997.
(6) Represents cash paid in lieu of accrued vacation.
(7) This amount includes a bonus of 500,000 options in
accordance with Dr. Banin's amended employment agreement
dated June 11, 1997.
(8) Mr. Strauch resigned from the Board of Directors and as
Chief Executive Officer of the Company effective June 30,
1997.
(9) Mr. Wilder joined TCSI on November 21, 1997.
(10) This amount includes 85,000 options granted as part of Mr.
Wilder's employment agreement.
<PAGE>
OPTION/SAR GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------
Number of % of Total Potential Realizable
Securities Options/SARs Value at
Underlying Granted to Exercise Assumed Annual
Options/SARs Employees in or Base Expiration Rates of
Name Granted Fiscal Year Price Date Stock Price Option
($/sh) Term (1)
5% 10%
- ---------------------------------------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ram A. Banin, Ph.D. 500,000 14.3 5.8876 6/11/03 $1,001,174 $2,271,321
Ram A. Banin, Ph.D. 125,000 3.6 6.1250 12/05/03 260,386 590,726
Arthur H. Wilder 85,000 2.4 6.9750 11/21/03 177,062 401,694
Arthur H. Wilder 25,000 0.7 6.1250 12/05/03 59,304 134,541
</TABLE>
(1) Amounts reflect rates of appreciation set forth in the Securities and
Exchange Commission's executive compensation disclosure rules, which
are more flexible than the rules under Financial Accounting Standards
Board Statement 123 used in financial reporting. Actual gains, if any,
on stock option exercises depend on future performance of the
Company's common shares and overall stock market conditions. No
assurance can be given that the amounts reflected in these columns
will be achieved.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR ENDED
DECEMBER 31, 1997 AND OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs at In-the-Money Options/SARs
Acquired on Value December 31, 1997 (#) at December 31, 1997 ($)
Name Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ------------------------------------------------------------------------- ---------------------------
<S> <C> <C> <C> <C>
Ram A. Banin, Ph.D. 75,000 355,628 90,000/730,000 313,001/1,441,700
Roger A. Strauch(2) 195,000 420,374 0/0 0/0
Arthur H. Wilder -- -- 0/110,000 0/134,000
</TABLE>
(1) The market closing price at December 31, 1997 was $8.00.
(2) Mr. Strauch resigned from the Board of Directors and as Chief
Executive Officer of the Company effective June 30, 1997.
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
Length of
Original
Number of Market Exercise Option Term
Options/SARs Price of Price at New Remaining at
Repriced or Stock at Time of Exercise Date of
Name and Principal Date Amended (#) Time of Repricing Price Repricing or
Position Repricing or Amendment Amendment
or Amendment (yrs)
- ------------------------ --------- -------------- ------------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Ram A. Banin, Ph.D., 1/28/97 75,000 $ 6.6250 $ 11.1667 $ 6.6250 4.9
President and CEO (1)
Roger A. Strauch, 1/28/97 30,000 6.6250 11.1667 6.6250 4.9
President and CEO
(1) (2)
</TABLE>
(1) On January 13, 1997, the Board of Directors approved an exchange of
outstanding stock options for new options with an exercise price equal
to the fair market value of the Company's Common Stock on January 28,
1997. This exchange offer was open to all employees of the Company.
The new options were issued January 28, 1997 with a 6 year life.
Executive options vest at 25 percent per year for 4 years;
non-executive options vest 50 percent the first year, then 25 percent
each year thereafter until fully vested.
(2) Mr. Strauch resigned from the Board of Directors and as Chief
Executive Officer of the Company effective June 30, 1997.
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG TCSI CORPORATION, NASDAQ
MARKET INDEX AND THE NASDAQ TOTAL RETURN INDEX FOR COMPUTER & DATA PROCESSING
SERVICES
The Comparison Stock Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts. The following graph assumes $100 invested on
December 31, 1992. The graph further assumes all dividends are reinvested. The
comparison indices utilized are the Nasdaq CRSP Total Return Index for the
Nasdaq Stock Market, U.S. companies (the "Nasdaq Market Index") and the Nasdaq
CRSP Total Return Index for Computer & Data Processing Services, SIC 737 (the
"Peer Group"). Historic stock price performance should not be considered
indicative of future stock price performance.
<TABLE>
<CAPTION>
Measurement Period TCSI Corporation Peer Group Nasdaq Market Index
<S> <C> <C> <C>
1992 100 100 100
1993 237.50 105.84 114.80
1994 341.65 128.53 112.21
1995 616.65 195.74 158.70
1996 312.50 241.54 195.19
1997 400.00 296.72 239.53
</TABLE>
Source: Center for Research in Security Prices (CRSP) at the University of
Chicago and the Nasdaq Stock Market, in previous years data was
obtained from Media General Financials Services Inc.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP as independent
auditors of the Company for the year ending December 31, 1998. If the
shareholders fail to ratify the appointment, the Board of Directors will
reconsider whether or not to retain that firm. Ernst & Young LLP or its
predecessor has audited the Company's financial statements since 1987.
Representatives of Ernst & Young LLP are expected to be at the Annual Meeting.
Such representatives will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2
<PAGE>
SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented at the
Company's 1999 Annual Meeting of Shareholders must be received by the Company no
later than November 28, 1998. Such proposals may be included in next year's
Proxy Statement if they comply with certain rules and regulations promulgated by
the Securities and Exchange Commission.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and Securities and
Exchange Commission regulations requires the Company's directors, certain
officers and greater than ten percent stockholders to file initial reports of
ownership of Common Stock and equity securities of the Company on Form 3 and
changes in ownership of Common Stock and equity securities of the Company on
Forms 4 or 5 with the Securities and Exchange Commission. The Company undertakes
to file such forms on behalf of the reporting person pursuant to a power of
attorney given to certain attorneys-in-fact. Such reporting officers, directors
and ten- percent stockholders are also required by Securities and Exchange
Commission rules to furnish the Company with copies of all Section 16(a) reports
they file.
Based solely on its review of copies of such reports received or written
representations that no other reports were required from such executive
officers, directors and ten percent stockholders, the Company believes that all
Section 16(a) filing requirements applicable to its directors, executive
officers and ten percent stockholders were complied with during fiscal year
1997, except the following officers and directors inadvertently reported the
following transactions late: Mr. Roger Strauch had a purchase transaction which
occurred in February 1997, which was disclosed in a Form 4 filing in April 1997.
Mr. Arthur Wilder became subject to Section 16 reporting requirements on
November 21, 1997, however, the Form 3 reporting this action was filed with the
Securities and Exchange Commission on December 4, 1997. Dr. Norman Friedmann
became subject to Section 16 reporting requirements on February 13, 1998,
however, the Form 3 reporting this action was filed with the Securities and
Exchange Commission on March 5, 1998. Mr. Arthur Wilder was granted the right to
purchase 25,000 shares of Common Stock in the Company on December 5, 1997, and
the Form 5 reporting this was filed with the Securities and Exchange Commission
on March, 2, 1998.
ANNUAL REPORT TO SHAREHOLDERS
The Company's 1997 Annual Report on Form 10-K and 1997 Annual Report To
Shareholders accompany this Proxy Statement.
OTHER BUSINESS
The Board of Directors knows of no other matters to be presented at the
Annual Meeting, but if any other matters should properly come before the
meeting, it is intended that the persons named in the accompanying proxy will
vote the same in accordance with their best judgment.
By Order of the Board of Directors
/s/ Arthur H. Wilder
Arthur H. Wilder
Chief Financial Officer,
Treasurer, and Secretary
March 17, 1998
<PAGE>
DETACH HERE
TCSI CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Arthur H. Wilder as proxy for the
undersigned, with full power of substitution, to act and vote all the shares of
Common Stock of TCSI Corporation held of record by the undersigned on March 16,
1998, at the annual meeting of shareholders to be held on Tuesday, May 5, 1998,
or any adjournment thereof.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
<PAGE>
DETACH HERE
[X] Please mark votes as in this example.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
FOR items 1 and 2. Management Recommends a Vote FOR items 1 and 2.
<TABLE>
<CAPTION>
1. Election of Directors duly nominated:
<S> <C> <C> <C> <C>
Nominees: John C. Bolger, Ram A. 2. Proposal to ratify the FOR AGAINST ABSTAIN
Banin, Ph.D., Norman E. Friedmann, appointment of Ernst & Young LLP [ ] [ ] [ ]
Ph.D., William A. Hasler, David G. as Independent Auditors
Messerschmitt, Ph.D., Harvey E.
Wagner 3. In their discretion, the Proxy is
authorized to vote upon such other
FOR WITHHELD business as may properly before the
ALL [ ] FROM ALL [ ] meeting.
NOMINEES NOMINEES
[ ] ----------------------------------
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name or
names appear hereon. For joint
accounts, each owner should sign. When
signing as executor, administrator,
attorney, trustee or guardian, etc.,
please give your full title.
Signature: ___________________________ Date: ____________ Signature: ___________________________ Date: ____________
</TABLE>
